The shares of the non-banking financial company gained up to 1 percent after a well-known brokerage suggested a ‘buy’ recommendation.
With a market capitalization of Rs 41,391.08 crore, the shares of L&T Finance Holdings Ltd were trading at Rs 166.50 per share, decreasing around 1.69 percent as compared to the previous price.
Looking into L&T Finance Holding’s performance, revenue increased by 3 percent from Rs 3,432 crore in Q3FY23 to Rs 3,534 crore in Q3 FY24. During the same period, net profit increased by 41 percent, from Rs 453 crore to Rs 639 crore.
Motilal Oswal, one of the well-known brokerages in India, gave a ‘Buy’ call on the Fintech stock with a target price of Rs 200 indicating a potential upside of 20 percent from Wednesday’s price of Rs 166.50 per share.
Here is the explanation for the possible upward target:
● LTFH has significantly boosted business momentum in its rural finance segment. Within its MFI business, 68% of the 9MFY24 disbursements were toward existing customers, thereby facilitating enhanced customer retention.
● Within its two-wheeler division, the company’s percentage of top clients in quarterly disbursements increased to 41% from 35% in the third quarter of FY23. LTFH has used its current 2W customer database and agreements with over 20 digital/web aggregators to source personal loans (PLs).
● In SME finance, LTFH has been actively focused on digitization and expanding its channel and branches. It expects geo-expansion and newer sub-products (aimed at specific ticket sizes) to act as the next lever for growth.
● LTFH’s credit rating is AAA from all credit rating agencies. The credit rating is based on a diverse retail mix, greater provision coverage ratio, and solid backing from parent L&T.
In the SME market, the business has maintained a monthly disbursal run rate of Rs. 300 crore or more, strengthened its geo presence by 56 additional sites using the hub and spoke model, and expanded the channel ecosystem through digital and voice activities.
L&T Finance Holdings Ltd is an NBFC that provides a wide variety of financial products and services, including farm equipment financing, two-wheeler financing, microloans, consumer loans, home loans, loans against property (LAP), real estate financing, infrastructure financing, infrastructure debt funds, and other services.
Written by:- Abhishek Singh
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